DEVELOPMENTS IN THE CHEMICAL AND RUBBER INDUSTRIES OF THE SINO-SOVIET BLOC IN 1961 AND PROSPECTS FOR THE FUTURE

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP79R01141A002400140001-8
• Release Decision: RIPPUB
• Original Classification: S
• Document Page Count: 51
• Document Creation Date: December 27, 2016
• Document Release Date: March 25, 2013
• Sequence Number: 1
• Publication Date: July 1, 1962
• Content Type: REPORT

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SECRET
Economic Intelligence Report
N? 9 ~
DEVELOPMENTS
IN THE GHEMIGAL AND RUBBER INDUSTRIES
OF THE SINO-SOVIET BLOC IN 1961
AND PROSPECTS FOR THE FUTURE
July 1962
CENTRAL INTELLIGENCE AGENCY
Office of Research and Reports
SECRET
50X1
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SECRET
Economic Intelligence Report
DEVELOPMENTS
IN THE CHEMICAL AND RUBBER INDUSTRIES
OF THE SINO-SOVIET BLOC IN 1961
AND PROSPECTS FOR THE FUTURE
This material contains information affecting
the National Defense of the United States
within the meaning of the espionage laws,
Title 18, USC, Secs. 793 and 794, the trans-
mission or revelation of which in any manner
to an unauthorized person is prohibited by law.
CENTRAL INTELLIGENCE AGENCY
Office of Research and Reports
SECRET
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report includes data on production, trade, and construction in these in-
dustries of the Bloc in 1961 and their prospects for the future. Recent
trends in Bloc policies on standardization and specialization of chemical
products and equipment also are reviewed. Products of the chemical and
rubber industries of the Bloc that are discussed in this report include
chemical fertilizers, plastics, chemical fibers, synthetic rubber, phar-
maceuticals, and motor vehicle tires.
50X1
~OX1
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Summary and Conclusions
1
I.
Intra-Bloc Developments .
5
A.
Long-Range Planning
5
B.
Specialization in Production of Chemicals
6
C.
Exchanges of Technical Data and Eguipment
7
D.
Standardization
8
A.
Chemical Technology and Equipment
9
1. Imports from the Industrial West
9
2. Exports to the Industrial West
9
3. Exports to Underdeveloped Areas
10
1. Rubber
11
2. Fertilizers
13
III.
Developments in Each Country of the Sino-Soviet Bloc
15
A.
USSR
15
1. Plan Fulfillment, 1961
15
a. General
15
b. Synthetic Rubber
17
c. Motor Vehicle Tires
17
d. Plastics
18
e. Chemical Fibers
19
f. Fertilizers
19
2. New Plans
21
3. Outlook
21
B.
East Germany
22
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Page
1. Plan Fulfillment, 1861 22
2. New Plans 2~+
3. outlook 2~+
C . Poland 2~+
1. Plan Fulfillment, 1961 2~+
2. New Plans 25
3. outlook 25
D. Czechoslovakia 25
1. Plan Fulfillment, 1961 25
2. New Plans 26
3. outlook 27
E. Rumania 27
1. Plan Fulfillment, 1961 27
2. New Plans 28
F. Hungary 28
1. Plan Fulfillment, 1961 28
2. New Plans 28
3. outlook 29
G. Bulgaria
1. Plan Fulfillment, 1961
2. New Plans
29
29
29
H. Albania 30
I, Communist China 31
1. Developments in 1961 31
a. Output of the Industry 31
b. Output and Supply of Chemical Fertilizers 31
c. Construction and Equipment Supply 32
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2 , outlook 33
J. North Korea 3~+
1. Production 3~-
2 . New Plans 3 5
3. outlook 36
K. North Vietnam 36
L. Outer Mongolia 37
Appendixes
Appendix A. Sino-Soviet Bloc: Planned Cooperation in the
Chemical Industries in Supply of Equipment
and Technical Assistance: Selected Develop-
ments in 1861. 39
Appendix B. Sino-Soviet Bloc: Imports of Chemical Equip-
ment and Technology from the Free World:
Selected Orders Placed in 1961
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DEVELOPMENTS IN THE CHEMICAL AND RUBBER INDiJSTRIES
OF THE SINO-SOVIET BLOC IN 19 1 AND PROSPECTS FOR THE FUTURE~-
Summary and Conclusions
Output of chemicals in the USSR and the European Satellites rose
sharply in 1961, a reflection of the high priority that has been accorded
this sector of industry for the past several years. Soviet production in
1961, as shown below, was 1~+ percent above the level in 1960, an acceler-
ating rate of growth, as the increases achieved in 1959 and 1960 were 10
and 12 percent, respectively. Increases in the European Satellites ranged
EAST GERMANY
BULGARIA
CZECHOSLOVAKIA
USSR
POLAND
HUNGARY
RUMANIA
Chemical Production 1-I tan
Actual
Total Industrial Production Actual
20~
Zoe
from 7 percent in East Germany to a high of 27 percent in Rumania, but in
every country the increase in output of chemicals was greater than the in-
crease in the total industrial production. Production of chemicals was
generally in accordance with plans announced at the beginning of the year,
although there were some significant failures to meet goals for individual
-~ The estimates and conclusions in this report represent the best judg-
ment of this Office as of 1 June 1962.
~ 14.5Ai
14!k
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commodities, notably those for synthetic materials in the USSR. In Com-
munist China the plan for production of chemicals was reported to have
been fulfilled, although output of the chemical industry actually may
have declined. However, production of a few chemicals, notably ferti-
lizer, reportedly increased.
Although the record of chemical production was fairly impressive,
the program of constructing new facilities went poorly. In the USSR,
investment in the chemical industry was scheduled to rise about 50 per-
cent, but the actual increase was only 13 percent. Investment plans
also were underfulfilled in East Germany and Czechoslovakia and probably
in Hungary and Bulgaria. Although the Polish investment plan for chem-
icals reportedly was fulfilled, this achievement is misleading, for 8 of
a total of 17 industrial projects not completed on schedule in 1861 were
projects of the chemical industry. Construction of chemical plants in
Communist China probably slowed considerably, but there is evidence that
investment in fertilizer plants was given high priority.
A continuing bottleneck in construction for the chemical industry
in the Sino-Soviet Bloc- has been the limited availability of chemical
equipment and technology, particularly for new products and processes.
To ease this bottleneck, the Bloc placed a number of new orders with
chemical engineering and equipment firms in the Free World during 1961.
The USSR signed about 18 major contracts in 1961 compared roughly with
about 50 signed in 1958-60. Approximately 10 major contracts were known
to have been signed by the European Satellites. For the first time,
Albania approached the Free World for chemical technology and equipment,
evidently to replace Soviet technical assistance that was discontinued
following the rupture in relations between the two countries. As an
indication of the importance of equipment from the Free World in the
chemical field, Polish sources revealed that at least 20 percent of the
equipment needed by the chemical industry of Poland in 1962 would be
obtained from the Free World.
To increase the accessibility of chemical technology of the Free
World, the USSR and several of the Satellites have been offering to the
West technical data for various chemicals. Few buyers have appeared as
yet, although the USSR and Czechoslovakia may have made a few sales in
1961. Exports to underdeveloped areas of standard types of equipment
and technical data in the chemical and rubber fields continued in 1961,
and a number of new agreements were concluded. The USSR and Czechoslo-
vakia, for example, agreed to supply tire plants to Ceylon and Ghana,
respectively, during the next 3 years.
~ For the purposes of this report, the term Bloc hereafter will always
refer to the Sino-Soviet Bloc.
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In addition to chemical and rubber-fabricating equipment, the Bloc
purchased record quantities of natural rubber in 1961. Imports for the
year amounted to about 530,000 tons, more than 100,000 tons in excess
of imports in 1960 and about 75,000 tons above the previous peak, which
was reached in 1959? A significant curtailment in purchases of rubber
by the Chinese Communists was more than offset by a sharp rise in imports
by the USSR. The increase in Soviet purchases apparently was a result
of the failure to put new capacity into operation according to plan.
Imports of synthetic rubber by the Bloc, negligible before 1958, in-
creased to x+8,000 tons in 1961, and the upward trend is likely to con-
tinue.
Within the Bloc, trade in chemical technology and equipment is being
increased, as evidenced by the large number of new agreements concluded
in 1961. Furthermore, a working group was set up in 1961 to facilitate
the exchange of chemical plant designs among member countries. (Designs
purchased from the Free World may be among those disseminated.) Stand-
ardization of equipment and designs also is being encouraged, as is
specialization in production of equipment. Intensified efforts appar-
ently also were made in 1961 to coordinate research and development work
in the chemical and rubber industries and to promote cooperation at the
plant level.
In recent years, much has been made in the Bloc of plans for the
specialization of chemical production, but statements made during 1961
indicate that little progress has been made so far in this direction.
Recommendations submitted for the consideration of the Council for
Mutual Economic Assistance (CEMA) apparently have not been economically
and technically feasible in many cases. Nevertheless, Czechoslovakia
did sign bilateral agreements with East Germany, Poland, and Hungary
providing for some specialized production, notably in the pharmaceu-
tical field.
Many of the meetings of CEMA in 1961 on the chemical industry dealt
with coordination of long-range plans, and work was begun on forecasts
of trends in chemical technology through 1980. Meanwhile, the USSR
announced plans apparently calculated to continue the rate of growth
in chemical output scheduled in the Seven Year Plan (1959-65) -- about
15 percent annually -- through 1980, and Czechoslovak and Bulgarian
planners released various bits of information indicating that their
long-range plans also were quite ambitious. Czechoslovakia plans to
make the chemical industry a "second basic branch of materials."
With regard to short-range goals, progress to date indicates that
many of the targets for 1965 of the Soviet and Satellite industries
~ Tonnages are given in metric tons throughout this report.
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will not be reached. In the USSR, investment in chemicals during 1959-61
was oxLly about 25 percent of the total planned for 1959-65, and the chem-
ical industry appears headed for a shortfall of at least 10 percent in
the goal to triple output during 1959-65. Some production goals, notably
the goal for 1865 for fertilizers, which was increased recently from 35
million to 37.7 million tons, may even be missed by much larger margins.
Underfulfillment of the goals for 1965 also is virtually certain in the
case of East Germany, but progress elsewhere in the Satellites appears
to be generally in line with plans. A recognition of the slow progress
toward goals in the USSR, as well as the serious view taken of the situ-
ation, is evident in Khrushchev's statement in March 1962 that it might
be necessary to convene the Central Committee of the Communist Party of
the USSR to discuss development problems of the chemical industry.
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I. Intra-Bloc Developments
A. Long-Range Planning
In 1961 the USSR announced ambitious plans for the development
of its chemical industry during the next 20 years. According to data
released at the 20th Party Congress in October 1961`, output of chemi-
cals in 1g8o is planned to be 17 times output in 1960 compared with a
fivefold increase for all industry. The rate of growth for the chemi-
cal industry over the next 20 years is to average 15 to 16 percent per
year, which is about the same as that planned for the Seven Year Plan
(1959-65) but above the average rate of 12 percent actually achieved
in 1959-61.
A few Satellite goals for chemical production in 1980 also were
released in 1961.- Output of chemicals, the Czechoslovak planners feel,
must increase ninefold during 1961-80 while industrial production is in-
creasing fourfold. They say such a relatively great increase is needed
because the limitations of the existing raw material base make it nec-
essary to make chemicals a "second basic branch of materials." The
Bulgarians announced that output of fertilizers in that country in 1980
is to be 10 times output in 1960. It also was reported that production
of plastics in the countries belonging to CEMA, excluding the USSR, would
increase l~+ times during 1961-80.
Discussions of long-range planning and coordination of such plans
for the chemical industry continued at the CEMA level. Following the
meetings of the Permanent Commission on Chemicals of CEMA in January and
November 1961, it was announced that the coordination of long-range plans
had been discussed along with the related problems of specialization by
the various countries in production of particular chemicals. At a meet-
ing of one of the Permanent Commission`s working groups, planning and
equipping of chemical plants under the long-range plan were discussed, and
it was stated that the efficient planning and building of new chemical
plants would be facilitated by (1) the joint planning of new enterprises;
(2) the introduction of new, highly practical machines and aggregates; and
(3) the construction of plants and installations in the open.~~ 50X1
One of the tasks that has been assigned to the Permanent Commis-
sion on Chemicals in connection with long-range planning is the fore-
casting of trends in chemical technology through 1980, which CEMA plan-
ners recognize to be a difficult job because of the highly dynamic
~ Goals for 1975 have been announced for the Polish and Rumanian chemi-
cal industries.
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nature of the industry. Early in 1961, working groups of the commission
were said to have begun this work in the following areas: synthetic rub-
ber, tires and other rubber products, plastics, chemical fibers, mineral
fertilizers, petrochemicals, basic inorganic chemicals, and paper and
cellulose. The working group for plastics asked a special group of ex-
perts to submit, by the end of 1961, a study of the extent to which non-
ferrous metals could be replaced by plastics.
B. Specialization in Production of Chemicals
In spite of the claim in December 1960 that CEMA had worked out
recommendations for specialization and coordination of production of some
500 chemical products accounting for 80 to 85 percent of the total volume
of production of the chemical industries of the countries belonging to
CEMA (excluding rubber products), evidence accumulated in 1961 that the
feasibility of some of these proposals was being reexamined. For example,
CEMA planners reportedly decided that the existing plan for specialization
in pharmaceuticals was much too elaborate and that perhaps the manufacture
of the most
important products should be initiated or kept at the national
level.
Similarly it was stated in an East German trade journal that
50X1
problems of planning and implementing s ecialization in the rubber industry
had not yet been satisfactorily solved.
The East German press also re-
50X1
ported that plans for specialization were not always economically and tech-
nically sound and that a "methodology" for specialization in chemicals was
being prepared.
Fina
lly, the Minister of the
Polish chemical industry
50X1
admitted in Novemb
er 196
1, following a meeting of
the Permanent Commission
on Chemicals, that
speci
alization in the chemical
industry was a "theme
which has not so far been developed" and indicated that the meeting was
devoted merely to the formulation of conditions on which specialization
should be based. ~ 50X1
Some progress was discernible, nevertheless, as a result of bilat-
eral negotiations. Following a meeting of the Joint Czechoslovak -East
German Committee for Economic, Scientific, and Technical Cooperation in
August 1961, it was reported that the two countries would cooperate in
production of laboratory chemicals, pharmaceutical raw materials, serums
and vaccines, textile dyes, rubber and asbestos products, and textile
and leather-processing agents.~~- Similarly, the Czechoslovak-Hungarian
~- At the 15th Session of CEMA held the following month, the discussion
centered around the guiding principles on which specialization should be
based, and intra-Bloc specialization in the production of weed killers
reportedly was established.
~ In a related development the chief of the East German chemical indus-
try stated in May 1961 that specialization in these products would help
free the East German economy from disruptive measures by West Germany.
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committee on cooperation reported agreement on bringing about further
expansion of specialization in the chemical industry. Also, Czechoslo-
vakia reported an agreement with Poland on specialization in production
of synthetic rubber, pigments, and pharmaceuticals.
C. Exchanges of Technical Data and Equipment
A number of new agreements between countries of the Bloc to ex-
change chemical technology and equipment were announced in 1961, supple-
menting the list of those already concluded for 1961-65.~ The new
agreements included provisions relating to technology and equipment for
pharmaceuticals, nitrogen fertilizers, basic chemicals, rubber, and tires.
.There was mention also of plans for joint construction by the USSR, East
Germany, Czechoslovakia, Poland, and possibly Hungary of a phosphorite
mining and concentrating combine in Estonia to serve the needs of the
latter four countries. At the same time, East Germany complained that
the quality of East German tires had been lowered because of a lack of
modern equipment that was not available on a large scale from other coun-
tries belonging to CEMA.~ Evidence also appeared in 1961 that Poland 50X1
was unable to obtain technical data for producing organophosphorus insecti-
cides from East Germany or the USSR.
There are indications that trade between countries of the Bloc
in chemical technology and equipment will be accelerated. Deliveries
of equipment for complete chemical plants in 1965 are to be about seven
times the deliveries in 1958, and efforts are being made to provide for
increased specialization in this area. Moreover, it was announced in
1961 that the Permanent Commission on Chemicals had established a Working
Group for Designing and Equipment and that the group had recommended an
exchange of designs among member countries for approximately 70 pro-
cesses.
Efforts also are being intensified to coordinate research and
development work in the chemical industry. Closer cooperation at the
research stage was planned in bilateral agreements involving Bulgaria
and Rumania, Czechoslovakia and the USSR, Poland and Rumania, and Poland
and Hungary. East Germany and Rumania agreed to joint research on cel-
lulose (rayon) fibers. Close collaboration was said to exist between
Soviet and Hungarian research institutes on the basis of a common re-
search plan. East German and Soviet specialists also were reported to
be working on the problem of the automation of production of divinyl-
styrene rubber; East Germany, the USSR, and Czechoslovakia were reported
to be collaborating on the automation of production of chlorine; and
Soviet and Hungarian specialists were reported to be examining the
Described as "coloring materials."
~~ For a selected list of agreements, see Appendix A.
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problem of the use of radioactive isotopes in measuring and regulating
instruments for the chemical industry. The working group of CEMA on
plastics discussed the coordination of research and development work
in this area through 1980,
Activities of CEMA in the synthetic fiber field reportedly came
to a standstill in 1959-60 following the decision by Rumania, and later
by Czechoslovakia, Poland, and the USSR, to buy synthetic fiber plants
in the Free World. The Rumanian government allegedly failed to send
representatives to a CEMA meeting in the fall of 1958 because it was
obligated not to reveal details of technology from the Free World and
felt that it would have difficulty avoiding revelations if representa-
tives were present. This case suggests the possibility that efforts by
CEMA to increase the exchange of indigenous technical data among Bloc
countries would have the effect of promoting the dissemination of tech-
nology being obtained in the Free World.
Cooperation at the operating level is being encouraged. Poland
and Hungary have agreed to coordination at the plant level in the fields
of polyvinyl chloride, ammonia, caprolactam, pharmaceuticals (steroid-
hormones), and photochemicals. Late in 1961, pharmaceutical plants in
Hungary and East Germany agreed to cooperate through exchange of skilled
workers. Previously in 1960, countries belonging to CEMA had exchanged
operating experience in the fields of ammonia and sulfite cellulose
through plant visits.
In 1961, there were evidences of slow progress in standardizing
construction of chemical plants in the USSR and the European Satellites.
The Polish Vice-Premier pointed to the "need for speeding up work of the
CEMA bodies on the standardization of the basic units of machines and
industrial equipment, especially as regards the new investment projects
in the chemical industry,"~ The lack of standardization in this area,
including mechanization an automation of chemical processes, was said
to result in much time lost "in the adjustments that are necessary due
to the different regulations in the individual countries." ~ Also
pointed out was the close relation of this problem to cooperation in
production of chemical equipment. Discussions continued in 1961 on
development of unified standards for chemical products, but no concrete
progress has been reported to date.
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II. Trade with the Free World
A. Chemical Technology and Equipment
1. Imports from the Industrial West
One of the most significant contracts concluded by the Bloc
in 1961 was one involving the purchase of $25 million worth of plastics-
making equipment from the UK by a consortium of four European Satellites.
Under the contract, which was signed in April after a year of negotia-
tions, East Germany, Poland, Czechoslovakia, and Rumania reportedly will
each obtain equipment for a plant capable of producing 2+,000 tons of
polyethylene plastic per year. Polyethylene is not produced commercially
in the Satellites as yet, but imports of this equipment will substantially
aid the four countries in meeting their goals for 1965.
During 1961 a number of other major contracts were signed by
countries of the Bloc. Among the Soviet purchases were three plants for
producing ammonia -- a petrochemical and a raw material for production
of fertilizer. The dramatic rise in imports by the Bloc of chemical
equipment from the Free World in recent years as a result of these con-
tracts is illustrated by Soviet trade statistics, now available through
1960, which give the value of imports of equipment for the chemical
industry~~ as follows (in million new rubles~~~): 1957, 6; 1958, 18;
1959, 70; and 1960, 122. As an indication of the current inflow, Poland
has indicated that at least 20 percent of the equipment needed by the
Polish chemical industry in 1962 will be obtained in the Free World.
2. Exports to the Industrial West
In 1961, countries of the Bloc made further offers of chemi-
cal technology to the Free World as a means of increasing the accessi-
bility of Western technology in this field and also of earning foreign
exchange. Late in 1960, East Germany agreed to give a British engineer-
ing firm the rights to an extensive list of East German chemical proc-
esses in exchange for assistance in obtaining for East Germany the
rights to a number of British patents. Then, in 1961, it was reported
~- Other major agreements made during 1961 are shown in Appendix B.
~-~ As listed in Soviet foreign trade statistics under the category
"equipment for the chemical industry." This category probably does
not include pumps, compressors, and other types of general industrial
equipment for use in chemical plants.
~~-~ Ruble values in this report are given in new rubles (based on the
Soviet currency reform of 1961). Foreign trade rubles may be converted
to US dollars at the official rate of exchange of 0.9 ruble to US ~l and
other rubles at a rate of 0.~+ ruble to US $l. Neither rate of exchange
necessarily reflects the value of the ruble in terms of the dollar.
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that a US firm had obtained rights to 60 Soviet patents and, in addition,
could arrange for rights to 10 chemical processes, Also, a second US
firm reported that it was preparing, jointly with a French firm, a sur-
vey of chemical and other processes available in the Bloc following visits
of its representatives to Eastern Europe.
From the details so far released it seems unlikely that much
will come of the efforts of the Bloc to sell chemical technology, because
of the generally inferior position of the Bloc in this field. For exam-
ple,- the USSR apparently has offered to sell technical data for producing
butadiene from butane, but Polish sources have admitted that the Soviet
process is inferior to the comparable US process, which the USSR, Poland,
and Rumania have all tried without success to obtain during the Yast sev-
eral years. In isolated cases, however, the USSR may have marketable
processes -- for example, one to produce phenol and acetone from isopro-
pyl benzene. A recent Soviet press article claimed, in fact, that sev-
eral foreign countries had purchased licenses from the USSR to use a
Soviet process for utilizing byproducts from the cumene process. 50X1
It was claimed in the Czechoslovak press that the country had sold tech-
nology for making cellulose and nylon, ~ but it was not clear whether 50X1
this statement referred to sales to countries of the Free World. Also,
Hungary appears interested in selling technology in the pharmaceutical
field to the US,
3. Exports to Underdeve7..oped Areas
There was no significant change during 1961 in the pattern
of exports of chemical technology and equipment from the Bloc to the
underdeveloped countries. As in the past, exports consisted mainly of
technical data and plants for producing basic chemicals, fertilizers,
pharmaceuticals, and rubber products. Selected developments are as
follows:
a. Czechoslovakia was to have begun construction of a
tire plant for India, the daily capacity of which is to be 500 tires
and 500 inner tubes.
b. Czechoslovakia signed an agreement to build a tire
plant for Ghana during 1962-63.
c. The USSR has contracted to build by 1964 a tire plant
for Ceylon, the initial annual capacity to be 250,000 tires and an equal
number of tubes,
d. East Germany is supplying India with a plant for
making 10,000 tons of calcium carbide per year.
~ Not all relating to chemical processes.
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e. The USSR will supply Indonesia with a chemical
plant capable of producing 100,000 tons of soda ash and 40,000 tons of
caustic soda per year.
f. Hungary will supply Ghana with a pharmaceutical plant
with an annual -capacity of 1 million ampoules and 1 billion tablets.
g. The USSR will supply equipment and technical assist-
ance for pharmaceutical plants in Egypt, Iraq, and Lebanon.
h. The USSR swill supply Indonesia with a superphosphate
plant.
i. The USSR will supply the United Arab Republic (Egypt
with equipment for a nitrogen fertilizer plant.
cal pliant.
j. Hungary will help Guinea build its first pharmaceuti-
There was little evidence in 1951
f
o
any current or planned
exports of technology or equipment from the Bloc for making rubber, the
newer types of plastics and synthetic fibers, and basic chemicals from
petroleum and natural gas -- a reflection of the limited capabilities
of the Bloc in these areas. There was, however, a report late in 1961
that 'the nitrogen fertilizer plant whic USSR is to help build for
Iraq
will be based on nat
l
.
ura
gas.
B. Chemicals and~Chemical Raw Materials
1. Rubbber
Imports by the Soviet Bloc of natural rubber increased sub-
stantially in 19,51 and more than offset a sharp decline in imports by
Communist China,. Statistics published by the International Rubber Study
Group indicate that the total imports by the Bloc amounted to about
530,000 tons compared with imports of 416,000 tons in 1960 and the pre-
vious peak of 45$-,000 tons in 1:959? Soviet imports were about
tons, an increase of about 155,000 tons above imports in 1 60.330'000
same time, Chinese Communist imports in 1961 were 82,000 tons, o~y the
about three-fifths of the 135,000 tons imported in 1960.
The rise in Soviet imports probably reflects a combination
of factors, including reduced Soviet stockpiles following curtailed
~ Official Soviet statistics on imports of rubber, which are not yet
available for 1961, sometimes differ significantly from those of the
International Rubber Study Group.
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purchases in 1960, lower world-market prices, and the failure to increase
production of synthetic rubber according to plan (33 percent, or about
116,000 tons) in 1961.x- The reduction in Chinese imports, partly coun-
terbalanced by reduced reexports to the USSR and the European Satellites,
probably reflects, in part at least, the general retrenchment of the
economy in 1961, efforts to conserve foreign exchange, and reduced activ-
ity in the rubber fabricating industry.
Imports of synthetic rubber by the Bloc from the Free World,
negligible before 1958, continued to increase in 1961 and are assuming
some significance. According to the International Rubber Study Group,
the Bloc purchased x+8,000 tons in 1861 compared with purchases of about
29,000 tons in 1960 and 16,000 tons in 1959? The USSR purchased 26,000
tons from the Free World, or about two and one-half times the purchase
of 10,x+00 tons in lg6o. Purchases by the Satellites also rose. On the
other hand, imports by Communist China totaled about 13,000 tons less
than in 1960, when 16,000 tons were purchased.
The Bloc made its first purchase of synthetic rubber from
Japan in 1961, when the USSR reportedly purchased 2,000 tons and Com-
munist China 500 tons. Larger sales to the USSR may be provided for in
a long-term contract now in the planning stages.
Although the USSR and at least four of the European Satel-
lites -- Poland, Rumania, Czechoslovakia, and Hungary -- have talked of
plants for commercial production of stereoregular, or stereospecific,
types of rubber,~~ which are complete substitutes for natural rubber, little
progress was reported in this direction in 1861. The USSR, which appar-
ently plans to produce annually about 200,000 tons of polyisoprene by
1965, reported development in August 1961 of a highly automated, low-
cost process. Initial production of polybutadiene also was reported.
In October 1961 a Hungarian trade official said that Hungary was anxious
to obtain technolo for the construction of a polybutadiene or a poly-
isoprene plant. Production of stereoregular rubber elsewhere in the 50X1
Bloc evidently is still in the planning stages. In view of the limited
progress to date in improving the technology of the Bloc in this area,
plus the evidence of shortfalls in producing other types of synthetic
rubber, it is probable that the Bloc will continue to be a large-scale
importer of natural rubber at least through 1965.
~- For further details on production of synthetic rubber in the USSR,
see III, A, 1, b, p. 17, below.
** Cispolyisoprene and cispolybutadiene. They are referred to as stereo-
specific because their molecular chains have a definite and specific spa-
tial arrangement. Cispolyisoprene is identical with natural rubber and
is often called the synthetic natural rubber. cispolybutadiene has the
same stereospecific structure as natural rubber but is said to have im-
proved properties.
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Information published in 1861 by the USSR revealed that the
quantities of Soviet potash exported to the Free World continued to rise
steadily in lg6o in spite of the fact that supplies of potash to domestic
agriculture declined. In 1959, exports amounted to x+39,000 tons, all but
8 percent of which went to the Free World. In 1860, exports jumped to
628,000 tons, of which about the same percentage went to the Free World.
Meanwhile, supplies to Soviet agriculture declined from l.g million tons
in 1959 to 1.8 million tons in 1860. Japan, the largest importer of
Soviet potash, took 38 percent of exports in 1959 and ~+0 percent in 1860.
It is uncertain as yet whether or not this trend was interrupted in 1861
following the Plenum of the Central Committee in January 1861, when a
higher priority for Soviet agriculture was ordered.
A similar conflict between exports and domestic requirements
appears to exist in the case of apatite concentrate. In spite of short-
ages of the concentrate at superphosphate plants and a decline in the
amount of phosphorus fertilizers supplied to agriculture, exports, about
one-third of which go to the Free World, continued to rise steadily in
1960.
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III. Developments in Each Country of the Sino-Soviet Bloc
A. USSR
1. Plan Ftiilfillment, 1961
a. General
Production of chemicals in the. USSR in 1961 rose 14 per-
cent, the highest rate of increase achieved during the Seven Year Plan,
but this progress was overshadowed by a significant shortfall in capital
investment. The reported increase of 14 percent- in production of Soviet
chemicals compared with increases of 10 and 12 percent, respectively, in
1959 and 1960 represents only a slight underfulfillment of the official
goal to increase output 14.5 percent. Nevertheless, production of pri-
ority chemical products -- fertilizers, rubber, fibers, and plastics --
failed to meet the plan, although increases in fibers and plastics were
substantial. Soviet production of selected chemicals in 1961 is shown
in the following tabulation:
~ Information made available during 1961 on the value of Soviet ehemi-
cal output in 1955 suggests that the value of such output in 1961 was
about 7.5 billion rubles.
~-~ Computed from reported percentage increase.
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Sporadic shortages of electric power and skilled labor
in the chemical industry showed up again during 1961. In addition, the
midyear fulfillment report indicated that increases in labor productivity
in the chemical industry lagged behind those in all industry and thus
tended to confirm the reported delays in the introduction of new chemical
technology and in the mastery of new processes. A further irritant was
the continued lack of coordination in supply and production plans, caused
in part by overoptimistic predictions of the startup of plants producing
primary chemical materials. Shortcomings continued in the procurement
of chemical equipment as a result of the disorganized planning of chemi-
cal construction in general.
Reflecting the widespread evidence of shortfalls in con-
struction, capital investment in the chemical industry was officially
reported to have increased only 13 percent compared with a planned in-
crease of about 50 percent.- Thus the investment goal for 1961 appar-
ently was fulfilled by only 75 percent. Investment goals were met or
exceeded for only ~+5 of 202 chemical enterprises being built, expanded,
or modernized in 1961. In addition, a midyear report revealed that con-
struction costs in the chemical industry had failed to decrease in
3 years -- mid-1958 to mid-1961 -- and that the costs of building some
major plants (synthetic rubber and tires) had actually increased.
Glaring examples of the lagging progress in construction
and the failure of recently developed chemical processes to meet expecta-
tions include the admission that new capacities for chemical fertilizers
in 1959-61 fell short of the plan by 2.7 million tons and that the actual
capacities of several of the newest Soviet synthetic rubber plants had
turned out to be 30 to ~+0 percent under planned capacities because of
errors made in planning the processes. In the vital area of petrochemical
raw materials, a plant that reportedly went into operation in 1959 using
a process based on electrocracking of methane to produce acetylene had
failed to provide any useful output as of November 1961.
~ The official plan published in December 1960 had stipulated an in-
crease of ~+2 percent in chemical investment in 1961, but the absolute
goal (1.278 billion rubles) was 50 percent greater than the level of
capital investment subsequently reported for 1960 (852 million rubles).
It is thus possible that in December 1960 the USSR overestimated the
actual fulfillment for 1960. The data on investment should be considered
approximate because the available data through 1960 include both state
and decentralized investment, whereas the 13-percent increase reported
for 1961 and the absolute figure given in the plan (1.278 billion rubles)
presumably represent only state investment. In the case of the chemical
industry, however, the difference may be slight.
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b. Synthetic Rubber
Although a number of Soviet rubber plants reported initial
production or expansion of facilities in 1961, it is virtually certain
that the production goal of a 33-percent increase above output in 1960 was
not met. Considerable evidence is available that serious delays in con-
struction were encountered and that defects were revealed in some of the
newer production processes. The Omsk Synthetic Rubber Plant, under con-
struction for about 10 years, failed to go into operation again in 1961.
At Sumgait the planned startup of facilities for producing butyl rubber
and styrenes failed to materialize, and an installation for production
of nitrile rubber by a continuous process was dismantled, defects having
proved to be too serious to be rectified in place. There has been diffi-
culty in obtaining sufficiently high yields of butadiene at some of the
newer rubber plants, and the redesign of certain equipment at the Sterli-
tamak plant was underway during 1961, although the plant went into opera-
tion only in 1960.
Nevertheless, some progress was apparent, New rubber
plants went into operation at Stavropol' and Temir-Tau, and initial pro-
duction of butadiene (sufficient to meet one-third of the plant's re-
quirements) was reported at Sterlitamak. Additional butadiene ca-
pacity was installed at Sumgait, and the initial production of polybuta-
diene, one of the new stereoregular rubbers, was reported at Yaroslavl'
in December. In August the development of a new, highly automated 50X1
process for pro uction of polyisoprene rubber was reported at an insti-
tute at Leningrad, the new process allegedly permitting production at
one-fifth the cost of other processes currently available. The 50X1
USSR also claimed development of a one-stage process for production
of synthetic rubber in 1961 by chemists of the Azerbaydzhan Academy
of Sciences.t
c. Motor Vehicle Tires
Production of motor vehicle tires in the USSR rose to
19 million units in 1961, an increase of 10.5 percent, but the shortage
of tires that has plagued the Soviet economy during the past several
years persisted throughout 1961. The shortage can be attributed to lag-
ging construction of new manufacturing facilities, to inadequate road
~ Production in 1960 is estimated to have been 350,000 tons.
~~ An intermediate for production of copolymer rubber.
~~ The Sterlitamak plant went into operation in 1960 but had used buta-
diene imported from other regions.
t Possibly referring to a one-stage process for producing butadiene,
a major component of most types of synthetic rubbers.
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life caused by the poor quality of tire components, and to the failure
to recap more than a negligible part of wornout tires. Construction
delays were encountered at Omsk, Yaroslavl', Krasnoyarsk, and Moscow
in 1861. Continued evidence of the low quality of Soviet tire cord is
apparent in the admission that 40 percent of all tires in the USSR go
out of operation because of inferior tire cord. In addition, the
quality of synthetic rubber provided by some of e newer rubber plants
is substandard. In spite of the shortage of tires, not more than 3 to
5 percent of wornout tires are being repaired. Equipment for 12 tire
repair plants schedu_l.ed for operation in 1961 had not been provided as
of June of that year.
Progress reported for the Soviet tire industry in 1g61
included the commissioning of the Dnepropetrovsk Tire Plant and expan-
sion of production at the Baku Tire Plant. The Dnepropetrovsk facility,
supplied by a British firm, reportedly will have an hourly output of
about 54 pounds of finished product per worker compared with 48 pounds
per worker in leading US tire plants. In spite of the reported expan-
sion of the Baku Tire Plant, there is evidence that many shortcomings
are still encountered and that some of the planned improvements in
mechanized operation have not been attained. Development is underway
on tires using metal cord and on the vulcanization of tires by radia-
tion. In addition, Soviet testing of tubeless tires for trucks is al-
most completed, and tires with replaceable treads apparently are ready
for serial production at one tire plant.
d. Plastics
Production of plastics and resins in the USSR rose to
about 405,000 tons in 1861, an increase of 22 percent compared, with a
planned increase of 32 percent. The failure to achieve the goal for the
second straight year suggests that continued difficulties may be en-
countered in fulfilling the Seven Year Plan. Possible evidence that a
revision of the Seven Year goal may already be under consideration ap-
peared in a Soviet article of December 1861, in which it was stated 50X1
that production of plastics in 1865 would be ive to seven times that in
1958, whereas the original goal was more than seven times that in 1958.
Concern is being voiced about disproportionate develop-
ment of branches producing basic plastic materials and those producing
fabricated plastic articles. No comprehensive plan apparently is yet
available for the processing of plastics scheduled for production dur-
ing the Seven Year Plan, especiall for provision of the required ma-
chinery and engineering talent. In addition, some of the new types 50X1
of plastics starting to be produce do not embody the necessary charac-
teristics for effective use in industry, lacking additives that would
impart stability or improved dielectric properties. Development work is
lagging on certain of the newer plastics, notably polycarbonates.
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Achievements of the Soviet plastics industry during 1961
included the initial production of polyformaldehyde plastic and poly-
propylene ,- the completion of a polyethylene installation at Groznyy~~
(to use a low-pressure process), and the construction of a unit for pro-
ducing urethane foam at the Roshal'sk Plastics Plant.
e. Chemical Fibers~-~
Soviet production of chemical fibers in 1961 totaled
250,000 tons, an increase of 18.5 percent compared with a planned in-
crease of 20 percent. The industry was again plagued by the low quality
of certain raw materials (cellulose and caprolactamt) and by shortages
of equipment for new plants. In addition, downtime for repair of exist-
ing equipment reportedly was high, and a number of plants attempting to
master new processes failed to fulfill the plan for labor productivity.
The Soviet offer to sell to Western firms in the early part of 1961 sub-
stantial quantities of an intermediate for production of a new synthetic
fiber su ests that disproportionate growth is occurring in the indus-
try. ~~ 50X1
Achievements of the Soviet chemical fiber industry in
1961 included the completion of the second section of the dacron plant
at Kursk,tt the first section of the caprolactam plant at Lisichansk,
and the initial production of acetate fiber at Engels. In addition,
facilities were being readied in October for production of cellulose
from reeds in Astrakhan', and it was reported that work was completed
on development of a new process for carbon disulfide.ttt The abundant
evidence of lags in installing new capacities for chemical fibers in
the USSR in 1961 included reports of delays at plants scheduled to pro-
duce nylon and orlon types of fibers, cellulosic fibers, and improved
viscose tire cord.
f. Fertilizers
Although Soviet production of mineral fertilizers in-
creased 10 percent to a total of 15.3 million tons in 1961, the level
~ A similar product is produced in the US with the trade name "Delrin."
-~-~ It is believed that this plant may have been scheduled for operation
as early as 1959 but that technical and other difficulties delayed start-
up.
~~ Including both cellulosic fibers and synthetic fibers such as nylon
and dacron.
t An intermediate for production of a nylon type of fiber.
tt There was some evidence, however, that inventories of dacron accumu-
lated in 1961 because of a lack of proper dyeing facilities.
ttt An intermediate for production of rayon.
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of output was modest compared with the ambitious goal for 1965, which ap-
parently was revised upward from 35 million to 37.7 million tons during
1961. Although Soviet reports maintain that the goal for production of
fertilizers in 1959-61 was exceeded, the planned introduction of new ca-
pacities for fertilizer in 1959-61 fell short by 2.7 million tons,- a
lag confirmed by Khrushchev at the Plenum of the Central Committee in
March 1962.*~ Earlier, in December 1961, Khrushchev, apparently recog-
nizing the lengthy construction periods required in the USSR for plants
producing the more effective fertilizers, stressed the importance of
quickly expanding output of the "cheapest kinds of mineral fertilizers --
above all, phosphorite and lime."~-~~
During 1961, two additional nitrogen fertilizer plants
in the USSR started using natural gas, and it was reported that 30 per-
cent of all Soviet ammonia was produced from natural gas, whereas 50X1
there was no such production before 1958. Ammonia was pro uced for the
first time at new plants at Salavat and Shchekino, and additional ammonia
capacities were put into operation at Novomoskovsk (formerly Stalinogorsk).
Initial delivery of raw potassium salts was reported from the new Saligorsk
combine,t as was initial production of sulfuric acid and superphosphate at
Chardzhou. New plants producing nitric acid went into operation at Rustavi,
Novomoskovsk, and Gorlovka.
The lag in introduction of new fertilizer capacities was
amply documented during 1961. Shortages of equipment or defects in equip-
menttt plagued construction of new or expanding nitrogen plants at Nevinno-
myssk, Fergana, Rustavi, and Lisichansk. Lags also were encountered in
the construction of facilities for production of superphosphate or phos-
phorus raw materials at Sumgait, Dzhambul, Sumy, and Kara-Tau. A report
of August 1961 indicated that the shortage of phosphorus-containing raw
materials and sulfuric acid had resulted in utilization of only 83 to 8~+
percent of the available capacities at superphosphate plants. In spite
of the reported shortage of phosphorus raw materials, however, the USSR
continues to export large quantities of such materials.
~ There is some evidence, however, that the goal for fertilizer for
1959-61 was unrealistically low in view of the ambitious goal for 1965.
~~ Although Khrushchev did not give the shortfall in absolute terms,
he stated that the plan for commissioning new facilities was fulfilled
by only 44 percent in 1959-61.
-~~~ In accordance with general practice, lime is not considered a ferti-
lizer in Soviet statistics.
t The Saligorsk combine was originally reported in operation in 1960.
tt The serious nature of the defects in equipment is illustrated by
the admission that 200 workers per day were required throughout 1960 to
repair defects in new equipment arriving at the Lisichansk Chemical Com-
bine, a producer of fertilizers.
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2. New Plans
Production of chemicals in 1962 is planned to increase 16.2
percent compared with the actual increase of 1~+ percent in 1961. All-
Union goals have been announced for several of the more important product
groups, with output of ammonia scheduled to increase 28 percent in 1962;
plastics and resins, 26 percent; synthetic rubber, 21 percent; and chemi-
cal fibers, 12 percent. Production of fertilizers is planned to reach
17.2 million tons (a 12-percent increase) and that of tires 21 million
tons (a 10-percent increase).
In December 1961 it was announced that 1.295 billion rubles
would be invested in the Soviet chemical industry in 1962, apparently an
increase of 17.7 percent above investment anticipated in 1961.- The re-
sults in 1961 appear to have been poorer than expected, however, and a
more recent Soviet report states that an increase of 22 percent is planned
for 1962 above the actual investment in 1961.~~ 50X1
There are indications that the USSR will initiate construction
of relatively few new chemical plants in 1962. The regime apparently will
put a high priority on completion of current chemical projects, however,
and 75 chemical installations are on the list of "especially important"
construction projects.
3. Outlook
There is little doubt that the large carryover of uncompleted
chemical plants and the decision to initiate construction of only a few
new chemical projects in 1962 will result in a substantial improvement
in the number of completions. Thus it is quite possible that the rate
of increase in production of chemicals in 1962 will be the highest achieved
thus far under the Seven Year Plan, although such an increase will partly
be the result of the lag in commissioning new capacities in 1961. In-
creases in production of plastics and rubber probably will be substantial,
and goals for production of fertilizers and fibers appear within reach.
Although sizable increases in production of Soviet chemicals
were attained in 1959-61, the rate of development required for implemen-
tation of the goals for the Seven Year Plan has significantly lagged.
Investment in chemicals in 1959-61 appears to have reached only about 25
percent of the investment of 10.0 billion to 10.5 billion rubles planned
for 1959-65, and technological improvements have been tardy and often more
~ Because the figure of 1.295 billion rubles does not equate with a 17.7-
percent increase above the official plan for 1961 (1.278 billion rubles),
the percentage increase probably relates to the anticipated fulfillment
in 1961 as of December of that year.
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expensive than anticipated. If an increase of 16.2 percent is achieved
in production of chemicals in 1962, the industry will still require
average annual increases of about 20 percent during 1963-65 to meet the
Seven Year Plan. Performance to date suggests that sustained increases
of this magnitude are highly unlikely, and the original Seven Year Plan
may be underfulfilled by 10 percent or more.
B. East Germany
1. Plan Fulfillment, 1961
In November 1961 it was claimed that production of the East
German chemical industry had increased 7.5 percent above output during
the same period in 1960, a 0.7-percent overfulfillment of the plan,~-
whereas production in industry as a whole increased only 6.2 percent
for the year, a slight underfulfillment of the plan. Thus the increase
claimed for the chemical industry for the first 10 months of 1861 is
about the same as the 7.6-percent increase reported for 1960 but sub-
stantially below the average annual rate of 11 percent required to ful-
fill the East German Seven Year Plan (1959-65) for the chemical industry.
In spite of the reported overftiilfillment of the plan for the
industry, the production plan for several products was not fulfilled.
It was announced in November that production of synthetic fibers in 1961
would exceed production in 1960 by ~+l percent, whereas the plan for 1962
had called for an increase of 50 percent. It was reported in October
that plans were not being met for production of calcium carbide and soda
ash and that the supply of rubber products was unsatisfactory because
production was lagging in the rubber industry. Production of nitrogen
fertilizer actually declined.
Achievements for individual products were considerably below
the goals set for 1961 in the Seven Year Plan. Production of synthetic
fibers was 13 to 1~+ percent below the goal, while production of other
products for which figures are available fell short of the goals by the
following percentage amounts: synthetic rubber and nitrogen fertilizer,
3 to ~+ percent; sulfuric acid, calcium carbide, and soda ash, 6 to 7 per-
cent; and phospho~;-us fertilizer, about 11 percent. Only caustic soda,
for which a very modest increase had been planned, was produced in a
slightly greater amount than scheduled.
~ Fulfillment of goals for some of the more important products groups
(fertilizers, chemical fibers, and plastics) will require even higher
annual increases during 1963-65.
~~ These figures imply a planned increase of 6.7 percent for 1961,
whereas the planned increase announced early in the year was 6.3 percent.
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The investment plan of the chemical industry for 1861 also
was underfulfilled. Investment was slightly more than 1 billion DME
but below the plan of 1.23 billion DME. Important additions, however,
were made to capacity, including capacity for 180,000 tons per year of
calcium carbide, equivalent to nearly one-seventh of production in 1961;
for 20,000 tons per year of polyvinyl chloride plastic, equal to more
than one-third of production in 1860; and for 6,000 tons per year of
polystyrene plastic, or about 150 percent of production in 1860.
Difficulties encountered by the chemical industry in 1861
included the perennial problems of poor management and inadequate sup-
port from the designing, construction, and machine-building sectors of
the economy and were compounded by problems resulting from the peculiar
political climate of 1861. The supply of manpower was inadequate, partly
because the large exodus of refugees preceding the closing of the Berlin
sector border on 13 August undoubtedly contained at least a proportional
share of workers and technicians from the chemical industry but also be-
cause insufficient numbers of university and trade school graduates have
been entering the industry.~~ 50X1
The performance of the industry also was adversely affected
by the campaign to achieve "immunity to disruptive maneuvers" by West
Germany -- that is, to become independent of West Germany as a source
of important materials and items of equipment. Dislocations occurred
as East Germany attempted to produce domestically products that previ-
ously were obtained from West Germany or to adapt processes to operate
with substitutes. The necessity of making extensive shifts in the
economy to assure immunity to disruption has been partly responsible
for the failure to maintain the schedules of the Seven Year Plan. To
some extent, however, the "immunity" campaign has been a handy excuse
for not meeting goals that would not have been met in any event. In
November it was reported that of about 30,000 tons of chemical materials
for which East Germany had been dependent on West German only about
100 tons remained to be "covered" from other sources. The "covering" 50X1
of import requirements, however, apparently means, in general, an ad-
vanced stage of contingency planning rather than an actual placing of
contracts. It also should be noted that independence from West Germany
does not imply independence from all Western sources and that, in fact,
some products previously imported from West Germany are now being fur-
nished by other Western countries.
-~ Deutsche Mark East (East German marks) may be converted to US dollars
at the official rate of exchange of ~+.2 DME to US $1.
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2. New Plans
Plans for 1962 call for an increase of "more than" 6 percent
in chemical output compared wih an increase of 5.8 percent for industry
as a whole. Production of plastics is to increase 26 percent and pro-
duction of chemical fibers 24 percent. Investment in the chemical in-
dustry is to be 25 percent greater than in 1961. The emphasis of invest-
ments is to be on completing projects already begun rather than on start-
ing new ones. A number of projects, especially those of small size,
scheduled to be started in 1962 have been postponed until the period
1963-65. 0 Production of cellulose acetate and methylene chloride, 50X1
both important to the East German film industry and formerly obtained
largely through imports from West Germany, is to increase by 100 percent
and 50 percent, respectively. The film industry in general has been
designated under CEMA as a principal supplier of photographic films to
other countries of the Bloc.
3. Outlook
Although no revisions have yet been announced in the goals
for 1965 -- and there is talk of resuming the tempo of the Seven Year
Plan in 1963 -- it is clear that the arrears that have accrued to date
will necessitate some downward revisions in production goals for 1965.
The increase in production during 1959-62 will average only about 8 per-
cent per year, and an increase of 1~- to 15 percent per year would be re-
quired during 1963-65 to meet the original goal of a 105-percent increase
during the 7-year period. Investment in the industry in 1962 is scheduled
to be 25 percent greater than in 1961, but a shortfall of 5 to 10 percent
in the investment plan for the Seven Year Plan is likely to occur. It is
significant that in spite of the emphasis on establishing a petrochemical
industry in East Germany, the completion of the first stage of the petro-
leum refinery at Schwedt, scheduled to be one of the two major centers
for petrochemicals, has been delayed a year, from 1963 to 196+.
C. Poland
1. Plan Ftiilfillment , 1961
The value of output of the Polish chemical industry increased
19.1 percent in 1961, substantially exceeding the planned increase for
1961 of 15.5 percent and the average annual rate of ab out 15 percent re-
quired to achieve a doubling of output during 1961-65. Investment in the
chemical industry in 1961 was valued at 7 billion zlotys, slightly in
~ Zlotys may be converted to US dollars at the official rate of exchange
of 4 zlotys to US $1. This rate of exchange does not necessarily re-
flect the value of the zloty in terms of the dollar.
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excess of the planned investment of 6.6 billion zlotys for 1861 and one-
sixth of the total planned investment of 42 billion zlotys during 1861-65.
A partial explanation for the favorable showing in output relative to the
plan may be found in a statement by the Minister of the Chemical Industry
that higher production than had been anticipated in the plans is being
attained at all newly opened plants.~~ 50X1
On the negative side, out of a total of 17 industrial proj-
ects that were not completed as planned in 1861, 8 projects were in
the chemical industry. In commenting on the fact that about one-half of
the delayed projects were chemical installations, the Polish Vice-Premier
stated that "this is a disquieting signal if one takes into account the
immense and difficult investment in the chemical industry." ~~ 50X1
2. New Plans
Output of the Polish chemical industry in 1962 is planned to
increase 14 percent above the level in 1961. The amount of investment
in 1962 is to be g billion zlotys, and in an effort to achieve quick pro-
duction results the funds are to be concentrated on such projects as
the Plock Petrochemical Combine and the nitrogen plant at Tarnow rather
than being spread over a wide range of projects. This measure of con-
centrating investments is to avoid a repetition of the failure to com-
plete the eight projects in the chemical industry in 1961, the completion
of which has been postponed until the first quarter of 1962. The Vice-
Minister of the Chemical Industry, B. Taban, stated that "in the field of
investments, 1962 will be decisive for the development of the chemical
industry during the whole Five Year Plan" for 1861-65.
3. Outlook
The output plan was exceeded in 1961, the typical pattern in
recent years, and the relatively modest goal of a l~+-percent increase in
1962 also is likely to be exceeded. Similarly the plan to double output
in comparison with the 1961-65 period probably will be achieved, aided
in a substantial way by the continued heavy import of chemical equipment
and technology from the Free World. Difficulties are likely to be en-
countered, however, in keeping construction of the Plock combine on
schedule.
D. Czechoslovakia
1. Plan Fulfillment, 1961
Output of the Czechoslovak chemical industry in 1961 reportedly
increased 13 percent above that for 1960, or somewhat in excess of the
planned increase of 11 percent. This increase is intermediate between
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the average rate of 12.0 percent achieved during the Second Five Year
Plan (1956-60) and the rate of 14.5 percent planned for the Third Five
Year Plan (1861-65). Although the over-all production plan was over-
fulfilled, production goals were not met for a number of important
groups of products: nitrogen fertilizers, plastics, sulfuric acid, and
chemical fibers.
Moreover, construction in the chemical industry went badly.
In December, new superphosphate installations (locations unknown) were
reported to have been completed during 1961, but considerable del, ays
were reported in other "key" projects in the chemical industry.
Specific projects where construction was lagging were not mentioned at
that time, but these lagging projects may have been the same as those
cited in the first quarter of 1961 for construction difficulties. At
that time, shortcomings were reported at nine plants covering abroad
range of chemical products. As was true in 1960, criticism also was
made of long-drawn-out construction periods, with the synthetic alcohol
plant at Most-Zaluzi given as an example.
Underfulfillment of construction plans in the chemical in-
dustry has been a chronic problem in Czechoslovakia, 1958 having been
the only recent year, according to Czechoslovak sources, when the plan
was fulfilled. The failures in 1961 were not unexpected, in that it
was reported late in 1960 that deliveries of chemical equipment in 1961
from domestic machine-building plants would not be in accordance with
previously established construction schedules. Delays in design work
were said to have contributed to shortfalls in construction work at the
Kralupy Rubber Works and the Stalin Works at Zaluzi. Also, actual con-
struction costs were said to be exceeding the plan. Failures also were
admitted in chemical research and development. As of the end of November,
some 56 percent of the planned tar ets for research and development were
in danger of not being fulfilled. Difficulties also were evident in 50X1
the automation of the chemical in us ry. The industry will not have com-
puters for working out chemical production data until 1964. Only semi-
automatic machines are available at present. Also, the automation plan
for the Stalin Works is not being fulfilled.
2. New Plans~-
A planned rate of growth in output of chemicals for 1962 has
not been released, but Czechoslovak planners expect output to exceed that
stipulated for 1962 in the Third Five Year Plan by 500 million koruny.-~
~ For a discussion of the 20 Year Plan (1961-80), see I, A, p. 5, above.
~- Koruny (crowns) may be converted to US dollars at the official rate
of exchange of 7.2 crowns to US $l. This rate of exchange does not neces-
sarily reflect the value of the koruna (crown) in terms of the dollar.
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Reflecting the lag in construction, however, greater utilization of ex-
isting capacity is to play the "decisive part" in increasing output,
and the increase as a result of the opening of new plants is to be
300 million koruny lower than envisaged by the Five Year Plan. .Although
unfinished projects will be given first priority in the construction plan
for 1962, the regime finds it necessary to count on slower progress in
the expansion of chemical capacities than originally planned. Partly re-
flecting the lag in production of nitrogen fertilizer, the plan for 1862
provides for the use of fertilizers to a lesser extent than anticipated
in the Third Five Year Plan.
3. Outlook
Production targets for 1965 seem to be endangered by the in-
auspicious performance in construction of chemical plants in 1961 and the
cutbacks in construction planned for 1962, but it must be recalled that
output goals in the Second Five Year Plan were substantially achieved in
spite of a chronic underfulfillment in construction. This situation may
be due in part to underestimates by planners of the improvements possible
in utilization of existing capacity. Most likely the plan to increase
production 97 percent during 1961-65 will not be underfLilfilled by any
substantial amount, but failures are likely in production of new chemical
products such as synthetic rubber.
E. Rumania
1. Plan Fulfillment, 1961
Output of the chemical industry in Rumanian increased 27 per-
cent in 1961 compared with an increase of 16 percent in 1960 and an aver-
age rate of 22 percent required to achieve the goal of the Six Year Plan
(1960-65) of more than tripling output during 1960-65. The over-all out-
put plan was exceeded, for the planned increase for the year announced
earlier was 18 percent. Of the total industrial investment, 18 percent
is reported as having gone into the chemical industry.
In spite of this favorable showing with respect to the over-
all output goal, the chemical industry was criticized for insufficient
utilization of production capacities and, in some instances, for the
poor quality of products. In addition, several projects were not com-
missioned on schedule, in part because of delays in supplying blueprints
and also because insufficient attention was given to the adoption of new
technological processes.~Moreover, it appears that output of chemi- 50X1
cal fertilizers and synthe is fibers was below the planned level. The
shortfall in the planned output of fertilizers may be due in part to the
Including paper, cellulose, and rubber industries.
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failure to commission the nitrogen fertilizer plant at Roznov. It is
significant that the plan goal for synthetic fibers, which was not
achieved, was quite low -- only 1,700 tons.
2. New Plans
Output of the Rumanian chemical industry is to increase 25
percent in 1862 -- slightly above the average rate required to fulfill
the Six Year Plan -- with production of fertilizer scheduled to rise about
50 percent (partly reflecting underfulfillment in 1961). Beginning in
the third quarter of 1962, production of tires is planned to reach suf-
ficient levels to fill the country's entire requirement from domestic
production.
A continued rapid rise in output of chemicals is probable,
although a tapering-off of the current rate of increase is likely to
take place during the last 2 or 3 years of the plan period. The exten-
sive purchases of technology and equipment from the Free World will be
a significant factor in implementing plans. The failure to commission
new installations on schedule may persist in 1962, which could imperil
the goals established for output of specific chemical and rubber products
in 1965.
F. H~
1. Plan Fulfillment, 1961
In 1961 the Hungarian chemical industry produced 20 percent
more than in 1960, thus fulfilling its goal. Within the chemical in-
dustry, output of pharmaceuticals is reported to have risen nearly
50 percent compared with a planned increase of 20 percent.
Hungary sent a trade delegation to the US in April 1961, at
which time the Hungarians presented a shopping list of items that they
hoped to purchase for the chemical industry. On the list was a plant
to produce acetylene from natural gas, a nylon plant, an activated car-
bon black unit, a caprolactam installation, and pharmaceutical and
plastics raw materials and equipment. In return, the Hungarians offered
to sell pharmaceutical technology. This visit apparently has produced
no noteworthy results to date.
2. New Plans
In 1962, output of the Hungarian chemical industry is planned
to rise 15.1 percent above that in 1961 (possibly including petroleum
products and aluminum). Hungary seems to be having considerable success
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in raising its output of pharmaceuticals, for by the end of 1962 such
output is expected to have reached the level planned for 1963. Pharma-
ceutical exports for 1962 are expected to rise even more than production.
3. Outlook
The Third Five Year Plan (1961-65) appears to be within reach,
as the achieved rates of 22 percent and 20 percent in 1960 and 1961, re-
spectively, were well above the planned increase of about 16 percent per
year. Although construction plans are not being implemented on schedule,
the increases in output achieved through new investment have exceeded
expectations, particularly in the pharmaceutical sector. On the 50X1
other hand, there have been complaints of a shortage of adequately trained
personnel, including chemical engineers for operating chemical plants and
also for design work.~~ 50X1
G. Bulgaria
1. Plan Fulfillment, 1961
Output of the Bulgarian chemical and rubber industry in 1961
was to increase 15 percent above that in 1960. Actually, this output
rose only 12 percent. This result was attributed to shortfalls at two
chemical enterprises (which happen to be Bulgaria's two lar est in ful-
filling their plans and also at a small antibiotics plant. Because 50X1
expansions were to be commissioned at the two large enterprises, it can
be inferred that they did not take place as scheduled. Although signifi-
cant increases in 1961 above output in 1960 were reported for phosphorus
fertilizers, sulfuric acid, and motor vehicle tires, only the plan for
the latter was fulfilled. Small increases were achieved in production
of caustic soda and nitrogen fertilizers, but output of soda ash declined
from the level reached in 1960.
According to a draft plan released in November 1961, output
of the Bulgarian chemical and rubber industry is to increase 15.5 percent
in 1962 compared with an increase of 10 percent in the total industrial
output. In spite of the substantial increases currently planned for
several products, it should be noted that these, now under the Fourth
Five Year Plan (1961-65), represent a downward revision of the goals for
1962 given in 1959 for the terminal year of the now canceled Third Five
Year Plan (1958-62). The old and new goals may be compared as follows:
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Unit
New 1962 Plan O
(Fourth
ld 1962 Plan
(Third
Product
of Measure
Five Year Plan)
n
Five
Year Plan)
Chemical ferti-
lizers (gross
weight)
Thousand tons
686
1,000
Sulfuric acid
Thousand tons
257
290
Soda ash
Thousand tons
232
243
Plastics and
resins
Thousand tons
15
16
Motor vehicle
tires
Thousand units
286
350 to 400
On the basis of performance in 1961 and earlier years, underf`~tl.fillment
of the revised plan for 1962 is likely. As regards the goals for 1865
for the chemical industry, none has been disclosed as yet except for
chemical fertilizers.
H. Albania
In December 1961 it was reported that the Albanian chemical in-
dustry, which consists of one pharmaceutical plant and a few other minor
installations, was expected to fulfill its plan by 125 percent. By
earlier agreements, Albania was to have obtained a nitrogen fertilizer
plant from the USSR and a phosphorus fertilizer plant (to be apart of
a chemical metallurgical combine) from Czechoslovakia. Construction
actually began on the Czechoslovak plant in February 1961,~but the 50X1
USSR reneged completely on its commitment. For this reason, the Albanian
government entered negotiations with an Italian firm in 1961 for the pur-
chase of a $25 million nitrogen fertilizer plant in place of the one
promised by the USSR. By the end of the year, however, a firm agreement
evidently had not yet been concluded. The Chinese Communists apparently
are to provide the financial backing for this purchase.
Albania is now shifting its sources of supply of many such im-
ports from the USSR and the European Satellites to the Asian Bloc and to
Western countries, such as Italy. In 1961, Albania signed a trade agree-
ment with Italy for 1962-64 under which Albania is to buy a number of
chemical and rubber products formerly obtained from the USSR, including
chemical fertilizers, sulfuric acid, pharmaceuticals, pesticides, rubber,
and tires as well as artificial and synthetic fibers and polyethylene
products. A trade agreement signed with Brazil in 1961 called for 50X1
Albanian imports of chemical products, basic pharmaceuticals, and anti-
biotics.~ By other trade agreements signed in 1961 and early in 1962, 50X1
Albania is to obtain chemical products from North Korea and chemical
fertilizers and pharmaceuticals from Communist China. 50X1
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I. Communist China
1. Developments in 1961
a. Output of the Industry
Over-a`11 production of industry in Communist China dropped
sharply in 1961, but the indications are that the chemical industry fared
somewhat better. The Chinese claimed, in fact, that output of some chemi-
cal products increased. Peiping stated in January 1962 that there had
been a "considerable increase" in output of chemical fertilizers, insec-
ticides, and consumer goods made from chemicals. The Chairman of
the State Economic Commission also claimed an increase in chemical fer-
tilizers and insecticides. Production of antibiotics such as peni-
cillin, syntomycin aureomycin, and chloromycetin also were said to
have increased.~~China's output of polyvinyl chloride in the first
10 months of lcc~~l was' 12.7 percent greater than in the same period of
1960. Peiping also claimed that the chemical industry "fulfilled"
its production plans, but the significance of this assertion is not
clear, as no details on plans were announced.
Output of some products, however, evidently declined.
Imports of crude rubber (natural and synthetic) amounted to about
100,000 tons in 1961 compared with imports of 158,000 tons in 1960,
and output of some rubber products probably declined. Production of
alkalies also may have dropped.
b. Output and Supply of Chemical Fertilizers
The report that production of fertilizer increased is
difficult to interpret, but it seems unlikely that production of chemi-
cal fertilizers in 1961 exceeded 2.8 million tons, the amount of the
unattained plan goal for 1960. Several of the eight major plants
producing chemical fertilizer claimed to have produced more than in
1960 or at least to have exceeded their production goals. These eight
plants account for the bulk of production of nitrogen and phosphorus
fertilizers., China's main plant for producing potassium fertilizer is
situated in a remote and desolate area in Tsinghai Province. This plant
probably had much difficulty in obtaining supplies to sustain its opera-
tions during 1961, and consequently the production of fertilizer probably
had to be reduced. By mid-1961, however, the plant was producing potas-
sium chloride with an average nutrient content of 48 percent compared
with an average of only 30 percent during the first quarter.
~- Reexports to the rest of the Bloc also dropped, from 18,000 tons to
virtually zero.
50X1
50X1
50X1
50X1
50X1
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The apparent increase in production of fertilizers tended
to be offset by a reduction in imports. Fragmentary information suggests
that imports of fertilizers of all types from Bloc and non-Bloc sources
may have totaled about 800,000 tons compared with imports of nearly 1.5
million tons in 1960, including a large amount (about 575,000 tons) of
phosphate rock from Morocco. Western Europe, the major supplier, is be-
lieved to have shipped about one-half of the amount delivered in 1960.
With the resumption of limited and unofficial trade with Japan, Chinese
agriculture obtained 50,000 tons of Japanese ammonium chloride fertilizer.
c. Construction and Equipment Suppl
It does not appear that construction of any large chemi-
cal plants was started in Communist China in 1961. Emphasis was on the
completion of projects already underway and on the enlargement of exist-
ing plants. Construction work continued on eight large new chemical
fertilizer plants and on seven of the eight large existing plants that
are being expanded. Construction of at least some of these large 50X1
chemical fertilizer plants, however, fell behind schedule. Three of
the eight new plants (at K'ai-feng, at Canton, and in Chekiang Province)
were scheduled to go into operation in 1 61 but available information
indicates that they were not completed. Nevertheless, 41 percent 50X1
of all capital investment in the Chinese Communist chemical industry in
1961 was reported to be allocated for construction of chemical fertilizer
plants. This investment was said to comprise the highest proportion des-
ignated for such uses since the regime came to power and reflects the
shift of
rior
ities within the industry in favor of support
for agri-
culture.
At the same time, it suggests severe cutbacks
in construc-
50X1
tion act
ive y in other sectors of the chemical industry.
Some progress was evident in the construction of "small
plants," a program that has been virtually abandoned in other industries.
According to the Chinese this approach has been retained in the chemical
industry because of the pressing need to supply chemicals to agriculture
in a hurry (small fertilizer plants can be built in about 6 months, where-
as large ones require 2 years or more) and also because small plants ma,k-
ing farm chemicals have an important advantage over small plants in other
industries, in that the quality of the product is not so critical.
By 1961 the planners in the chemical industry apparently
had decided upon a few types of standard designs for small plants using
modern production methods and had convinced the regime that valuable
resources should be committed to push forward construction of a number
of plants of each type. Most of the miniature synthetic ammonia plants
were of two sizes: 800 tons per year (producing about 3,000 tons of
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aqueous ammonia fertilizer) and 2,000 tons per year (producing 8,000 tons
of ammonium bicarbonate fertilizer). In the Shanghai area alone, there
were 12 of the 800-ton plants in production by December 1961. One
more of the few existing 2,000-ton plants was about to begin operations
late in 1961 in Shantung Province.
The construction of small phosphorus fertilizer plants
was more widespread because these plants are relatively simple to build
and operate. Plants with a capacity of x+,000 tons per year of sulfuric
acid and 10,000 tons per year of superphosphate appear to have been
adopted as standard. The Chinese also are using plants that were con-
verted from "discarded" small blast furnaces. These plants have a ca-
pacity of 10,000 tons per year of calcium-magnesium phosphate. Con-
struction of plants other than fertilizer plants received little atten-
tion in 1961, judging by the dearth of press reports.
Given the priority to concentrate on making equipment
for chemical fertilizer plants, various machine and equipment-producing
plants strived to step up production of the necessary units. Shanghai
apparently was a major producing center for complete sets of synthetic
ammonia equipment for plants of various sizes of annual capacities:
small (800 tons), medium-size (2,000 tons), and large (25,000 tons). 50X1
Enterprises producing tubing, boilers, machine parts, instruments, an
electrical equipment turned out seamless steel tubing, high-pressure
compressors and piping, meters, valves, and other component parts. In
the first half of 1961, Shanghai completed 12 sets of e uipment for
800-ton plants and 7 sets for 2,000-ton plants.~~ 50X1
2. Outlook
Announcements from Peiping indicate that the general guide-
lines for the whole economy in 1962 constitute virtually a playback of
the policies set down in 1961. Although problem areas in industry are
to be further stressed, no significant upturn in industrial output is
suggested, Capital construction, however, is to be "further reduced,"
but the "weak links in industry, such as the capacity of the ... chemi-
cal industries, must be strengthened."~ Expectations are that no ma-
jor construction projects will be started in the chemical industry but
that resources will be concentrated on winding up projects near comple-
tion, especially large fertilizer plants. Emphasis probably also will
be placed on building a small number of modern small and medium-size
fertilizer plants.
The ambitious plans for chemical fertilizers made in 1958 were
severely jolted by the withdrawal from Communist China of technicians from
the Bloc and by the curtailment in supply of major equipment for expanding
the large nitrogen facilities built by the USSR. China is forced to rely
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on its own machine-building industry, which apparently has just begun to
overcome some problems connected with series production of equipment,
notably units to withstand high pressures for making synthetic ammonia.
Experience to date, however, has been chiefly in making equipment for
small nitrogen fertilizer plants that will add relatively little to the
national output of fertilizer for several years, even if problems con-
nected with installation and operation are involved. More time is needed
to develop experience and materials for producing equipment for numerous
large nitrogen fertilizer plants of 100,000 tons per year or more.
Communist China will continue imports of certain chemical
products, particularly fertilizers and crude rubber. There is some evi-
dence that imports in 1962 of fertilizer materials of all types from
Western Europe, combined with an anticipated rise in deliveries from
Japan, might more than double the estimated amount of about 800,000 tons
in 1861. In January a Japanese trade firm concluded a contract to ship
100,000 tons of urea during 1962. Japanese surplus stocks of ammonium
sulfate also are available to China, but the latter has continued to in-
sist on a very low purchase price, and the producers believe such sales
would hurt their industry and jeopardize sales to other Asian countries.
Imports of crude rubber, chiefly natural rubber, axe likely to amount
to nearly 120,000 tons in 1962. This amount is greater than the esti-
mated import in 1961 but less than receipts during several previous years.
Chinese exports of chemical products are not likely to increase appreci-
ably above the low level set in 1961, and the reexport of natural rubber
probably will be insignificant.
J. North Korea
The chemical industry in North Korea apparently did poorly
in 1961, the first year of the North Korean Seven Year Plan (1961-67),
which calls for an average annual rate of growth in chemical output of
about 26 percent. No report has been issued on over-all plan fulfill-
ment, nor has a percentage increase in chemical output been given, but
reported increases in output of several chemicals, as shown below, in-
dicate only modest advances:
Product
Thousand Tons
Percentage Increase
Above 1960
Chemical fertilizers
(gross weight)
662
18
Sulfuric acid
274
7
Caustic soda
26
5
Calcium carbide
1~+1
12
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Production of polyvinyl chloride and other plastics, however, was said
to have increased rapidly in the course of the year.
2. New Plans
Practically no information is available on plans for 1962.
Although the general aims of the Seven Year Plan for the North Korean
chemical industry were announced in 1960, the concrete goals for a
number of products, along with added details, were given in 1961. The
goals for 1967 are as follows:
Chemical fertilizers
(gross weight
Pesticides
Sulfuric acid
Caustic soda
Soda ash
Calcium carbide
Plastics and resins
Artificial and synthetic
fibers
Pharmaceuticals
1,700
12
650
100
113
530
68
9~+
N.A.~
By 1967 the over-all chemical output in terms of value is planned to in-
crease four times the level of 1960, which, as stated above, is an average
of about 26 percent per year. As an indication of the scope of North
Korean plans for the chemical industry, comparison can be made with the
fertilizer plans of certain European Satellites. The North Korean goal
for 1967 is 1.7 .million tons, whereas, by 1965, Hungary and Bulgaria plan
to produce about 1.4 million tons each and Rumania about 2 million tons.
The chemical fiber goal given above would make North Korea second to
East Germany in the Bloc in per capita production. A petroleum refinery,
which also will produce basic petrochemicals, is to be built at Aoji by
1967. North Korea, which produces no tires at present,~--~ is to build a
synthetic rubber plant with a capacity of 15,000 to 20,000 tons and a
tire plant. The capacity of the latter is unknown, but it is to be sup-
plied by Communist China.
-~ Five times the level of 1960.
~~- In 1961 a chemical research institute, aided by workers of the Pyong-
yang Rubber Plant, succeeded in producing a tire from polybutadiene, a
synthetic rubber with properties approximating those of natural rub-
ber.
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3. Outlook
North Korea is apt to have difficulty in obtaining the equip-
ment that it needs to implement the Seven Year Plan. The most vulnerable
item would appear to be the tire plant to be obtained from Communist
China. It also should be noted that North Korea has had difficulty in
expanding production of phosphorus fertilizer in the past.
K. North Vietnam
In 1861, the first year of its First Five Year Plan (1861-65),
the North Vietnamese government claimed to have increased its output of
chemical and rubber products 56.5 percent above that for 1860. The chemi-
cal industry, however, is still in an embryonic state, and the first
chemical plants of any size will be the Phu Tho Superphosphate Plant, the
Viet Tri Chemical Combine, and the Bac Giang Nitrogen Fertilizer Plant,
which are now under construction with aid from other countries of the
Bloc.
Scattered reports have been received on production of chemicals
and rubber products in 1861. North Vietnam reportedly produced 1,900 tons
of caustic soda during the year as initial production of this product got
underway. Production of apatite, a phosphorus-containing-raw material
used in producing pulverized crude phosphate fertilizer and superphosphate
fertilizer, reportedly rose 17.6 percent in 1961. Most of the apatite
extracted from North Vietnam's extensive deposits is exported to other
countries of the Bloc, although some ~+0 tiny fertilizer plants built in
the countryside of North Vietnam consume a small part of the output. With
Soviet aid, production of polio vaccine began in 1861. By the end of 1861
the Hanoi Rubber Goods Factory, with the assistance of Chinese Communist
specialists, was ready to begin trial production of motor vehicle tires.
With regard to construction activity, it appears that the Phu Tho
Superphosphate Plant, which is being built with Soviet aid, was not in
operation by the end of 1g61 as planned.~Construction of North Viet- 50X1
norm's first modern insecticide plant, with an annual capacity of 1,000
tons, was reported to have been largely completed by the end of 1861, but
there has been no indication so far of a start in production. Communist
China has been helping with construction of this plant and also with the
building of the nitrogen fertilizer plant at Bac Giang. North Vietnam
is continuing to establish natural rubber plantations, but commercial
output is not expected to begin until 1g65.
The only goal announced for chemical output in 1862 is an increase
in production of fertilizer of more than four times. This announcement
~ Index of 530.
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suggests that the Phu Tho plant is now scheduled to be put into operation
in the course of 1962. One of the major projects in which over-all in-
dustrial investments are to be concentrated in 1962 is the Bac Giang
Nitrogen Fertilizer Plant.
The fulfillment of these and other goals for the North Vietnamese
chemical industry during the First Five Year Plan depends to a large ex-
tent on continued receipt of aid from other members of the Bloc. Because
of the present economic difficulties in Communist China, North Vietnam
may not be able to maintain its schedule for construction of those chemi-
cal plants that were to be furnished wholly or in part by Communist China.
L. Outer Mongolia
Some details were released in 1961 on plans to develop a chemical
industry in Outer Mongolia during the period of the Third Five Year Plan
(1961-65). Under various economic-technical aid agreements signed in
1960-61, Outer Mongolia is to receive chemical plants and technology from
several countries of the Bloc. During 1962-63 the USSR is to provide an
oxygen plant, which is to produce enough oxygen to cover the industrial
and medical needs of Outer Mongolia. By 1963, Communist China is to com-
plete construction of the Dzuunharaa Alcohol Plant, which will produce
annually 1 million liters (l.l million. quarts) of alcohol, and by 1964 a
second section of this plant is to produce 50 tons a year of carbon di-
oxide. Hungary is expected to furnish the equipment for a veterinary
pharmaceutical plant for production of animal vaccines and hormones. One
source reported that in 1961 a plant with an annual production capacity
of 5 million plastic articles was to be built in Ulan Bator, but the coun-
try providing this plant was not mentioned. Also, in 1961 an official of
Outer Mongolia reportedly stated that the government would soon erect a
phosphate fertilizer plant, although some members of the Ministry of Agri-
culture believe that there is no need for fertilizer, because most of the
crops are being grown on virgin land.
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APPENDIX A
SING-SOVIET BLOC: PLANNED COOPERATION IN THE CHEMICAL INDUSTRIES
IN SUPPLY OF EQUIPMENT AND TECHNICAL ASSISTANCE: SELECTED DEVELOPMENTS IN 1961
Recipient of Aid Supplier of Aid Type of Aid
Czechoslovakia Technical data for chemicals "Technical papers on new technological processes
and pharmaceuticals for chemical production and the manufacture of
pharmaceuticals." Also information on the design
and running of compressors for the chemical in-
dustry.
Czechoslovakia Joint venture Construction of a phosphorite mine and concentra-
Hungary (?) tion plant is planned at Kingisepp in Estonia.
East Germany
Poland
Poland Chemical equipment
Czechoslovakia USSR Technical data
USSR Technical data
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"Numerous Soviet rosin and turpentine plants will
receive Polish equipment."
Plans and blueprints for improved technological
processes in the chemical industry.
Relating to the design of a chloroprene rubber
plant. The supply of Soviet experience and
knowledge reportedly saved the work of a year
of 10 research workers.
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Recipient of Aid Supplier of Aid Type of Aid Comments
Czechoslovakia USSR Technical data Soviet experts will participate in planning a
(Continued nitrogen fertilizer plant.
USSR Technical data Relating to the design of a plastics-processing
plant.
USSR Complete plants For production of sulfuric acid and divinylbenzene.
USSR Technical data Petrochemical technology, including information
on methods of purifying olefins used for syn-
theses and on isolation of aromatic hydrocarbons.
East Germany USSR Technical data All technology necessary for the planning of two
tire plants.
Poland Czechoslovakia E quipment Complete plant to produce "phosphorus fertilizer
from a carbamide base."
Czechoslovakia East Germany Technical data Relating to production of trichloroethylene,
monochloroacetic acid, suspended polystyrene,
formic acid, cumene phenol, and acetylaldehyde
(from acetic acid .
Poland Technical data Relating to the use of catalyzers in produc-
tion of synthetic rubber monomers and to
production of trichloroethylene.
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Recipient of Aid
Supplier of Aid
Type of Aid
Comments
Rumania
Czechoslovakia
Joint venture
Construction of a cellulose combine for processing
East Germany
reeds,
Poland
Czechoslovakia
E quipment and technology
Czechoslovakia will build a plant to produce
2,300 tons of viscose rayon annually.
Poland
E quipment
For ammonia synthesis.
Albania
Czechoslovakia
Training of workers
In rubber-fabricating industry.
Communist China
Czechoslovakia
E quipment for chemical
To be delivered sometime after January 1961.
fiber production
Czechoslovakia
Technical data
Inorganic chemical industry and the processing of
rubber and plastics.
North Korea
Czechoslovakia
Exchange of technical data
In the field of manufacturing artificial fibers.
Cuba
Hungary
Technical assistance
Assistance in the organization of a pharmaceuti-
cal industry and of a planning institute of the
chemical industry.
Bulgaria
E quipment and technical
Plant for producing calcium carbide will be sup-
data
plied.
Hungary
USSR
Technical aid and equip-
For a methanol plant with a capacity of 15,000
ment
tons per year.
Bulgaria
East Germany
Complete plant
Cellulose and rayon staple fiber.
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APPENDIX B
SING-SOVIET BLOC: IMPORTS OF CHEMICAL EQUIPMENT AND TECHNOLOGY
FROM THE FREE WORLD: SELECTED ORDERS PLACED IN 19 1
Importing Production Capacity Price Exporting Scheduled
Type of Plant Country (Metric Tons) (Million US $) Country Plant Site Completion Date Remarks
6.25 UK Merseburg 1964 Negotiations conducted by a consortium
of countries of the Bloc, including
East Germany, Czechoslovakia, Poland,
and Rumania. The total value of the
contract covering the purchase of
specialized equipment and process
data for four plants is provisionally
set at $25 million.
Polyethylene
Czechoslovakia
24,000 per year
6.25
UK
N.A.
L964
Polyethylene
Poland
24,000 per year
6.25
UK
P1ock or
Kedzierzyn
1964
Polyethylene
Rumania
24,000 per year
6.25
UK
N.A.
1964
Polystyrene
Chemical fibers and
Rumania
N.A.
-
2.24
UK
N.A.
1963
To produce all types of general-
purpose and impact grades plus spe-
cial grades and expandable poly-
styrene.
intermediates
Rayon
Cellulose acetate
USSR
USSR
24,000 per year
7,000 per year
N.A.
N.A.
Japan
Japan
N.A.
N.A.
N.A.
N.A.
Cellulose
USSR
200,000 per year ~
16 ~
Italy
Arkhangelsk
1963
a. A few sources have ascribed a capacity of 00,000 tons to this plant.
b. Other prices have been quoted between $11 million and $11.9 million.
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Importing Production Capacity Price Exporting Scheduled
Type of Plant Country (Metric Tons) (Million US $) Country Plant Site Completion Date
Chemical fibers and inter-
mediates (Continued)
Nylon-66 USSR 6,000 per year
Dimethylolethyleneurea USSR 12,000 per year 50-percent
water solution
Caprolactam (two plants) USSR N.A. N.A. Italy Rustavi N.A.
Chernigov
Product to be used to wrinkle-proof
(drip-dry) fibers.
To be .constructed by a UK firm with
equipment from both the UK and West
Germany.
Cellulose Poland 245 per day N.A. Finland N.A. N.A. A Finnish firm will supply "main"
machinery.
Orlon type of fiber Poland Initially 5,000; ulti- 5.6 UK Lodz N.A. Acrylic fiber. The seller to supply
Tire-processing USSR N.A.
equipment
Butyl-rubber USSR N.A.
processing equipment
Equipped to carry out only an inter-
mediate phase in the total production
of tires.
5.07 UK Vol'zhskiy Mid-1963 Contract is for all the necessary equip-
ment for handling, storing, and auto-
matic weighing of the basic raw mate-
rials for making tires.
4.23 UK N.A. Delivery scheduled Equipment for filtration, drying, wrap-
in July-December ping, and packaging butyl rubber.
1962
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rtilizers
Urea
trochemicals
Ammonia
Ammonia
Poland
USSR
USSR
500 per day
350 per day
N.A.
4.2
N.A.
N.A.
UK
West Germany
Belgium
Ammonia
USSR
420 per day
N.A. ~
Italy
Methanol
USSR
720 per day
N.A.
Italy
Propylene
USSR
10,000 per year
N.A.
Japan
Propylene
USSR
10,000 per year
N.A.
West Germany
Oxygen and nitrogen
Poland
(Three plants each with
N.A.
UK
10,000 cubic meters of in December 1962. The UK firm, in con-
oxygen and 12,500 cubic junction with a US firm, is supplying
meters of nitrogen per the process techniques.
24 hours)
c. The ammonia and methanol plants apparently are part of the same installation, at Least part of the payment for which will be provided in the form of petroleum.
d. Possibly Shchekino or Novomoskovsk (formerly Stalinogorsk), both being sites of fertilizer plants.
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License, specifications, and equipment.
A small part of output will be used as
cattle feed. The plant will employ a
Japanese process licensed to a British
firm.
Gor'kiy Delivery early in Natural gas basis.
1963
Tula area J Late in 1962 or
early in 1963
Tula area Late in 1962 or
early in 1963
N.A. Delivery scheduled
during 1961
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Importing
Production Capacity
Price
Exporting
Scheduled
Type of Plant
Country
(Metric Tons)
(Million US $)
Country
Plant Site
Completion Date
Remarks
Other chemicals
Oxygen (six plants)
USSR
(Each unit to have a ca-
14.12
Japan
N.A.
N.A.
pacity of 15,000 cubic
meters per hour)
Ethylenediamine
USSR
3,000 per year
N.A.
Italy
N.A.
N.A.
Monochlorophenoxy
USSR
4,200 per year
3.8
UK
Ufa
January 1964
Hormone weed killer.
acetic acid
Ethylene oxide
Rumania
N.A.
5.6
Italy
N.A.
N.A.
The deal is believed to have been com-
Ethylene glycol
(estimate for
pleted.
each plant)
Formaldehyde
Rumania
N.A.
N.A.
Italy
Fagaras
N.A.
An Italian firm is participating in
construction.
Tripolyphosphate soda
Rumania
10,000 per year
1.5
Belgium
Ploesti area
N.A.
Vitamin C
Rumania
N.A.
N.A,
UK
N.A.
N.A.
Calcium carbide and
Bulgaria
5 per hour of calcium
N.A.
West Germany
Reka Devnya
By 1965
To be operated in connection with a
acetylene
carbide
polyvinylchloride plant under con-
6tI'i10tl.On
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